Private-label sales spell success for stores, customers

By Allison Cerra

NEW YORK Customers seeking a good deal in a weak economy are looking no further than private-label brands, according to a recent report by Nielsen.

In his report "Store Brands Flex Muscle in Weak Economy," Nielsen's SVP consumer and shopper insights Todd Hale said U.S. store brands have garnered more sales, including a 17.3% of share dollars, in addition to 21.9% share of units by March 2010 -- up 2.1 and 1.9 points, respectively, since 2007.

Additionally, the customer profiles driving such sales are not who you think. Hale said both young women and middle-class families represent those customers seeking more bang for their buck. And with tiered offerings, including organic and one-of-a-kind items, store-brand purchases may soon become the norm across all customer profiles.

Hale added that store brands demonstrated its power by capturing a 20 unit share or higher in 48-of-the-117 categories analyzed by Nielsen. Last year, Nielsen found that private-label brand sales grew by 7.4% to $85.9 billion within food, drug and mass-merchandisers (including Walmart), with shares recorded at 16.9%.

"In most countries, the concentration of a few dominant retailers correlates well with higher store-brand share, but there are exceptions," Hale wrote. "This is also true in the U.S. where higher store brand shares in markets are served by a few dominant retailers. With the likelihood of continued consolidation of U.S. retailing in the years to come, expect to see continued growth in store brand shares."